Cameron defends HMRC seizure plans

Prime Minister David Cameron has defended plans to give the taxman new powers to seize money directly from the bank accounts of people who owe more than £1,000 in tax or tax credits.

An influential House of Commons committee has said it has "considerable concern" over the plans, and urged further scrutiny of the debt collection proposal, which was unveiled by Chancellor George Osborne in his March Budget.

Mr Cameron insisted that it was right to pursue tax debtors by every means possible, warning that the alternative would be to put up tax rates.

Under the scheme, HM Revenue and Customs (HMRC) will be allowed to gain access to money held in a debtor's bank or building society account - including joint accounts and Isas - without needing to apply to a court.

The cross-party Treasury Committee said in a report: "The proposal to grant HMRC the power to recover money directly from taxpayers' bank accounts is of considerable concern to the committee. Giving HMRC this power without some form of prior independent oversight - for example by a new ombudsman or tribunal, or through the courts - would be wholly unacceptable."

The committee also highlighted the potential for fraud and error if the taxman was given direct access to millions of accounts, warning: "This policy is highly dependent on HMRC's ability accurately to determine which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past.

Promoted stories

"Incorrectly collecting money will result in serious detriment to taxpayers. The Government must consider safeguards, in addition to those set out in the consultation document, to ensure that HMRC cannot act erroneously with impunity. These might include the award of damages in addition to compensation, and disciplinary action in cases of abuse of the power."

HMRC said the new powers would affect a "small core" of around 17,000 people a year who typically owe £5,800 in tax and tax credit debts. The cash will not be taken under the plans unless it still leaves the debtor with at least £5,000 across their accounts.

The revenue body argues that joint accounts must be included in the plans, otherwise they would give debtors an opportunity to wriggle out of paying what they owe.

In cases where someone who owes nothing to the taxman shares a joint account with a debtor, the taxman would only recover debt from half of the funds in the account.

Anyone whose name is on the account would be notified when a hold has been placed on the funds and both the account holder who owes tax and the one who does not would have the right to appeal

Eamonn Butler, director of free-market think-tank the Adam Smith Institute, condemned the plans as a "fundamental assault on the rule of law" and "dangerous".

He said the proposed new power "is contrary to the fundamental principle that people are innocent until proven guilty".

UK Independence Party (Ukip) leader Nigel Farage told LBC 97.3 radio: "It's appalling. What the taxman now does is he sends you a demand and says 'You owe me this money, you're guilty. Prove to me your innocence'. Now we are going to give them the power not just to send us the demand and threaten us, but to take it straight out of our bank accounts. It mustn't be allowed to happen."

Mr Cameron told Sky News: "I think we have a choice here. If we don't collect taxes properly and make sure people pay their taxes properly, we look at the problem of having to raise tax rates. I don't want to do that, so I support the changes that the Chancellor set out in the Budget, which is to really say that not paying your taxes is not acceptable.

"I'm sure the Treasury will look very carefully at the detail, but it's very clear that they can only do this if it's a debt of over £1,000, they can only do it if there's £5,000 or more in the account after this has been completed. There's a set of rules and regulations.

"But on the general principle, do we want to pursue every avenue of making people pay their taxes that they are meant to pay before we put up taxes - because that's the alternative - absolutely, yes we do."

A spokesman for HMRC said: "Most people pay their taxes on time, but a minority do not, and some refuse to engage with us at all.

"This will only affect a tiny number of debtors, whom we have contacted a minimum of four times to ask for payment."

A Treasury spokesman said: "The Government's long-term economic plan is to reduce the deficit so that we deal with our debts.

Share article

"It is therefore important that people pay the tax they owe on time. Although the vast majority do this, there is still a minority that chooses not to pay, despite being able.

"The proposed powers will give HMRC another tool to collect tax debt owed. The current consultation includes a range of safeguards to ensure the power is tightly targeted."

Promoted Stories

Comments (3)

This would be the start of a slippery slope towards state control of people's assets. It might start with the best of intentions but once the legislation is in place a future, less benign, government will be able to grab your money at will. They will be able to help themselves to your money, right or wrong with no let or hindrance. My limited experience of HMRC is less than inspiring. Will they too be taking it from the accounts of big corporations who pay little or no tax now. I would bet not. Where is democracy in this?We are sleepwalking into a totalitarian State.

This would be the start of a slippery slope towards state control of people's assets. It might start with the best of intentions but once the legislation is in place a future, less benign, government will be able to grab your money at will. They will be able to help themselves to your money, right or wrong with no let or hindrance. My limited experience of HMRC is less than inspiring. Will they too be taking it from the accounts of big corporations who pay little or no tax now. I would bet not. Where is democracy in this?We are sleepwalking into a totalitarian State.The Pits

This would be the start of a slippery slope towards state control of people's assets. It might start with the best of intentions but once the legislation is in place a future, less benign, government will be able to grab your money at will. They will be able to help themselves to your money, right or wrong with no let or hindrance. My limited experience of HMRC is less than inspiring. Will they too be taking it from the accounts of big corporations who pay little or no tax now. I would bet not. Where is democracy in this?We are sleepwalking into a totalitarian State.

Score: 5

LUSTARD says...1:09pm Fri 9 May 14

crap they can allready take your home straight from u and put u on the street simple, hang on you dont think they want to make u homeless and pennyless as well do you.

crap they can allready take your home straight from u and put u on the street simple, hang on you dont think they want to make u homeless and pennyless as well do you.LUSTARD

crap they can allready take your home straight from u and put u on the street simple, hang on you dont think they want to make u homeless and pennyless as well do you.

Score: 2

varteg1 says...3:40pm Sat 10 May 14

It is possible to visualise a severe rise in the cash under the mattress syndrome Who the hell will be stupid enough to let the banks look after their dosh if there is the slightest chance the tax man will be able to sequester their account? If there is a chance one is to be robbed, one may as well take the safe option of keeping your money close to hand, and knowing the odds are against becoming a statistic in the robbery figures, by criminals, one can be totally certain, when the 'official robber' drops into your account, you'll not escape. Get granny to knit you a sock to stash it in.

It is possible to visualise a severe rise in the cash under the mattress syndrome
Who the hell will be stupid enough to let the banks look after their dosh if there is the slightest chance the tax man will be able to sequester their account?
If there is a chance one is to be robbed, one may as well take the safe option of keeping your money close to hand, and knowing the odds are against becoming a statistic in the robbery figures, by criminals, one can be totally certain, when the 'official robber' drops into your account, you'll not escape.
Get granny to knit you a sock to stash it in.varteg1

It is possible to visualise a severe rise in the cash under the mattress syndrome Who the hell will be stupid enough to let the banks look after their dosh if there is the slightest chance the tax man will be able to sequester their account? If there is a chance one is to be robbed, one may as well take the safe option of keeping your money close to hand, and knowing the odds are against becoming a statistic in the robbery figures, by criminals, one can be totally certain, when the 'official robber' drops into your account, you'll not escape. Get granny to knit you a sock to stash it in.

Score: 1

Sorry, an error occurred.

Post a comment

Remember you are personally responsible for what you post on this site and must abide by our site terms. Do not post anything that is false, abusive or malicious. If you wish to complain, please use the 'report this post' link.

Ipsoregulated

This website and associated newspapers adhere to the Independent Press Standardards Organisations's Editors' Code of Practice. If you have a compaint about editorial content which relates to inaccuracy or intrusion, then please contact the editor here. If you are dissatisfied with the response provided you can contact IPSO here